NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Professional Services industry. The net income has significantly decreased by 2836.6% when compared to the same quarter one year ago, falling from $1.18 million to -$32.40 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Professional Services industry and the overall market, HEIDRICK & STRUGGLES INTL's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for HEIDRICK & STRUGGLES INTL is currently lower than what is desirable, coming in at 30.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.70% is significantly below that of the industry average.
- In its most recent trading session, HSII has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- HEIDRICK & STRUGGLES INTL has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HEIDRICK & STRUGGLES INTL turned its bottom line around by earning $0.42 versus -$1.31 in the prior year. This year, the market expects an improvement in earnings ($1.05 versus $0.42).
Heidrick & Struggles International, Inc. provides executive search and leadership consulting services in the Americas, Europe, and the Asia Pacific. It facilitates the recruitment, management, and deployment of senior executives. The company has a P/E ratio of 35.7, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Heidrick & Struggles International has a market cap of $324.5 million and is part of the
industry. Shares are down 30.9% year to date as of the close of trading on Wednesday.
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